United States v. Search of 235 South Queen Street

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-5144
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
IN THE MATTER OF THE SEARCH OF 235 SOUTH QUEEN STREET,
MARTINSBURG, WV,
Defendant - Appellant.
Appeal from the United States District Court for the Northern
District of West Virginia, at Martinsburg. Frederick P.
Stamp, Jr., Senior District Judge. (3:06-mj-00033-FPS-JES-1)
Argued: September 25, 2008 Decided: November 4, 2008
Before MOTZ, KING, and DUNCAN, Circuit Judges.
Dismissed by unpublished per curiam opinion. Judge King wrote a
separate concurring opinion.
ARGUED: William Benjamin Moffitt, III, MOFFITT & BROADNAX,
Alexandria, Virginia, for Appellant. Paul Thomas Camilletti,
OFFICE OF THE UNITED STATES ATTORNEY, Martinsburg, West
Virginia; Randolph John Bernard, OFFICE OF THE UNITED STATES
ATTORNEY, Wheeling, West Virginia, for Appellee. ON BRIEF:
Sharon L. Potter, United States Attorney, Wheeling, West
Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Appellant was indicted on various charges stemming from her
alleged scheme to defraud the government by over-billing for her
legal services to a federally subsidized program. The United
States sought access to her closed case files and electronic
records. Appellant argued in response that the documents were
protected by various privileges, specifically the attorney-
client privilege, the work product privilege, and the Fifth
Amendment privilege. The district court issued an order
rejecting Appellant’s assertions of privilege and this appeal
followed.
Because Appellant retains possession of the disputed
documents and has not been cited with civil contempt for her
refusal to turn them over, this case presents an interlocutory
appeal over which we lack jurisdiction. Accordingly, we
dismiss. 1
I.
Appellant is an attorney licensed to practice in West
Virginia. On December 22, 2005, Appellant incorporated her law
1
Appellant also raises the issue of whether the subpoenas,
and subsequent court orders, ordering production of the disputed
documents are moot. Because we dismiss for lack of
jurisdiction, we do not reach this issue.
2
practice into a Professional Limited Liability Corporation
(“PLLC”). During the fall of 2006, the United States Attorney’s
Office began an investigation of Appellant’s possible fraudulent
billing of the West Virginia Public Defender Services. On
November 17, 2006, a search team executed a search warrant at
Appellant’s law office. The search team failed to find all of
Appellant’s closed case files and electronic records. On
November 16 and 17, 2006, the investigating grand jury issued
two subpoenas duces tecum ordering Appellant to appear on
December 5, 2006, bringing all her closed case files, her server
and her backup hard drive. Appellant failed to appear.
Appellant subsequently sent a letter to the United States
Attorney’s Office, invoking her Fifth Amendment privilege
against self-incrimination as to the act of producing the
subpoenaed materials. The United States filed a motion to
compel production of the materials sought, which the district
court granted. Various motions, including Appellant’s requests
for clarification and the United States’ motion to show cause,
followed. While these motions were pending, the grand jury that
had issued the subpoenas on November 16 and 17, 2006 indicted
Appellant on mail fraud, wire fraud and conspiracy. Thereafter,
3
the grand jury’s term expired and no new grand jury was
empaneled. 2
On July 11, 2007, the magistrate judge to whom the matter
was referred issued an order ruling on the attorney-client and
work product privileges for the various categories of subpoenaed
documents. The magistrate judge dismissed without prejudice the
government’s claim that the crime-fraud exception vitiated these
privileges. The magistrate judge found that, on the evidence
presented, the government had not established a prima facie case
of fraud. 3 The magistrate judge further held that, because
Appellant incorporated her law practice as a PLLC on December
22, 2005, the Fifth Amendment act of production privilege does
not apply to corporate documents created or received after that
2
On July 10, 2007, the United States served a trial subpoena
duces tecum pursuant to Federal Rule of Criminal Procedure l7(c)
for the same disputed documents for use in a related criminal
case. (Apparently there were clerical errors on the subpoena
which made it technically impossible to comply with.) On July
11, 2007, Appellant filed a motion to quash the subpoena,
claiming that the United States was improperly using its
subpoena power as a discovery device. The issue of whether the
July 10, 2007 trial subpoena should be quashed or modified is
not currently before this court.
3
The government later submitted a supplemental memorandum,
together with several exhibits, in support of the application of
crime-fraud exception. These filings formed the basis of the
district court’s November 19, 2007 ruling on the crime-fraud
exception.
4
date. Appellant filed several objections to the magistrate
judge’s order.
On November 19, 2007, the district court entered an order
holding, in part, that the crime-fraud exception vitiated
Appellant’s attorney-client and work product privileges with
respect to the disputed documents and that Appellant had no
Fifth Amendment privilege with regard to corporate documents
created or received on or after December 22, 2005, as the
privilege does not apply to corporations. The appeal before us
was taken from this order.
As of the date of oral argument, however, Appellant
retained possession of the disputed documents and no civil
contempt order had been filed against her. As discussed below,
under controlling precedent such an appeal is interlocutory and
must be dismissed for lack of jurisdiction.
II.
With certain narrow exceptions, the appellate jurisdiction
of this court extends only to appeals from final orders of a
district court. 28 U.S.C.A § 1291 (2006) (“The courts of
appeals . . . shall have jurisdiction of appeals from all final
decisions of the district courts of the United States . . .”);
see Cobbledick v. United States, 309 U.S. 323, 324-25 (1940); In
re Carefirst of Md., Inc., 305 F.3d 253, 255 (4th Cir. 2002).
5
Generally, for purposes of section 1291, a district court order
is “final” if it “ends the litigation on the merits and leaves
nothing for the court to do but execute the judgment.” Catlin
v. United States, 324 U.S. 229, 233 (1945) (citation omitted).
So long as the matter remains unfinished, open, or inconclusive,
there may not be any intrusion by appeal. Cohen v. Beneficial
Indus. Loan Corp., 337 U.S. 541, 546 (1949). The purpose of
this final judgment rule is to combine in one review all
reviewable stages of the proceeding in order to enhance the
effective administration of justice, preventing the harassment
and cost of interlocutory appeals from enfeebling the justice
system. 4 See Cohen, 337 U.S. at 546; Cobbledick, 309 U.S. at
325.
Under the “collateral order doctrine”, however,
interlocutory appeals are allowed in a small class of decisions
that “finally determine claims of right separable from, and
4
The Second Circuit has further expounded on the reasons for
the statutory requirement of finality for appealability: “the
elimination of unnecessary appeals, since the complaining party
may win the case or settle it; the absence of irreparable harm
from the vast majority of orders requiring production of
documents; the potential for harassment of litigants by nuisance
appeals, and the fact that any appeal tends to delay or deter
trial or settlement of a lawsuit; the burden on the reviewing
court’s docket from appeals of housekeeping matters in the
district courts; and the slim chance for reversal of all but the
most unusual discovery orders.” Am. Express Warehousing, Ltd. v
Transamerica Ins. Co., 380 F.2d 277, 280 (2d Cir. 1967).
6
collateral to, rights asserted in the action, too important to
be denied review and too independent of the cause itself to
require that appellate consideration be deferred until the whole
case is adjudicated.” Cohen, 337 U.S. at 546. For a collateral
order to be immediately reviewable, it must meet three stringent
conditions: the order must “[1] conclusively determine the
disputed question, [2] resolve an important issue completely
separate from the merits of the action, and [3] be effectively
unreviewable on appeal from a final judgment.” Will v. Hancock,
546 U.S. 345, 349 (2006) (quotation marks and citations
omitted). An order that fails to meet any one of these
requirements is not immediately appealable. See Carefirst, 305
F.3d at 258. An order is “effectively unreviewable” only if the
order at issue involves an asserted right “the legal and
practical value of which would be destroyed if it were not
vindicated before trial.” Lauro Lines S.R.L. v. Chasser, 490
U.S. 495, 498-99 (1989) (quotation marks and citations omitted).
Further, the value of the asserted right must be “of a high
order.” Will, 546 U.S. at 352-53. It is not the mere avoidance
of trial through an interlocutory appeal that counts when asking
whether an order is effectively unreviewable if review is left
until later, but rather what counts is the “avoidance of a trial
that would imperil a substantial public interest.” Id.(citation omitted) (emphasis added).
7
The Supreme Court has on several occasions dealt
specifically with the appealability of discovery orders. In
Alexander v. United States, 201 U.S. 117 (1906), the Court held
that a federal circuit court’s order directing a witness to
answer questions and produce documents before a special examiner
lacked the finality requisite for appeal. Id. at 121-22. Only
if the witness refused to comply and was held in contempt would
the right to appeal arise. Id. Similarly, in Cobbledick, the
Court held that a witness ordered to testify in a grand jury
proceeding has no right of appeal “until the witness chooses to
disobey and is committed for contempt.” 309 U.S. at 328; see
also United States v. Ryan, 402 U.S. 530, 532-33 (1971) (holding
that the respondent may refuse to comply with an order for
production before a grand jury and litigate those issues if
contempt or similar proceedings are brought against him; if his
contentions are rejected by the trial court, they will only then
be ripe for appellate review). 5 Citing Alexander, Ryan and
Cobbledick, this court has held, “Orders enforcing subpoenas
5
In Perlman v. United States, 247 U.S. 7, 12-13 (1918), the
Court allowed immediate review of an order directing a third
party to produce documents that belonged to the appellant,
Perlman. Id. at 12-13. Perlman claimed that these documents
were immune from production. Id. To have denied review would
have left Perlman without recourse because the third party could
not have been expected to risk a contempt citation in order to
secure for Perlman an opportunity for judicial review. Id.; see
also Ryan, 402 U.S. at 532.
8
issued in connection with civil and criminal actions, or with
grand jury proceedings, are normally not considered final. To
obtain immediate review of such a district court enforcement
order, the party to whom it is issued must defy it so that a
contempt order, which is considered final, is entered against
him.” Reich v. Nat’l Eng’g & Contracting Co., 13 F.3d 93, 95
(4th Cir. 1993) (citations omitted); see also In re Subpoena
Duces Tecum, 228 F.3d 341, 345 (4th Cir. 2000).
In the instant case, the district court’s order of November
19, 2007, holding that Appellant’s claims to various privileges
were either vitiated or inapplicable and ordering the production
of the disputed documents, was not a final order. Rather, it
was a single phase in the drawn out criminal investigation into
Appellant’s billing activities. Therefore, the only way that
the order is immediately appealable is if it fits within the
“collateral order doctrine.”
Since Appellant retains possession and control over the
disputed documents (making Perlman inapplicable) and she has not
been held in contempt for refusing to produce the documents,
this court’s precedent controls. See Reich, 13 F.3d at 95.
There can be no immediate review of the district court’s order
since it is part of an ongoing dispute and Appellant has not
been held in contempt for her failure to comply.
9
III.
Because Appellant’s appeal is not from a final order and
does not meet the requirements of the collateral order doctrine,
this court lacks appellate jurisdiction. Accordingly, the
appeal is
DISMISSED.
10
KING, Circuit Judge, concurring:
I write separately to express my considered view that the
lawyering in this case has resulted in a waste of judicial and
legal resources.
Put succinctly, at oral argument the government abruptly
abandoned its earlier position on the viability of the subpoenas
and this entire proceeding — conceding that they are moot (and
that this appeal is merely an “academic exercise”) because the
grand jury expired after the defendant was indicted. The
government had theretofore — in both the district court and its
appellate brief — consistently maintained to the contrary.
Thus, if the government’s mootness position had been recognized
and adopted in a timely manner, this proceeding would not have
occurred. In any event, the prosecution does not bear all the
blame. If the defense had conducted some elementary research,
it would have recognized the jurisdictional problems underlying
its effort to pursue an interlocutory appeal.
Finally, the failures of the lawyers to recognize the
obstacles attendant to their respective positions were further
emphasized at oral argument. When the government’s lawyer was
asked by our presiding judge whether the lawyers had “talk[ed]
to each other,” his response was simply “never.” Such a lack of
communication between counsel seems inexcusable, and we are
entitled to expect more.
11
That said, I agree that this appeal must be dismissed for
lack of jurisdiction and thus concur.
12